Investment in growth sector
ASI targets private rented sector with £44m deals
Aberdeen Standard Investments (ASI) has indicated its commitment to the private rented sector with a £44 million investment in two residential blocks in Edinburgh and Leeds.
It has acquired Lochrin Quay, a 113-unit canalside residential block in the Fountainbridge area of Edinburgh.
The new-build property close to the city’s Exchange business district, offers a range of accommodation including studios and apartments, and is already 80% occupied.
The £27.5 million purchase is the second residential acquisition for a £2.3 billion multi-sector portfolio.
Separately, ASI’s UK PRS Opportunities 1 Fund has committed £17.25 million for the development of a new 107-unit residential scheme in Leeds.
This investment will be the second asset for the fund, which was launched in 2016 to focus on large investments in the private rented sector across the UK, including income-producing assets and development opportunities.
The transactions increase ASI’s total residential assets under management in the UK to more than £700 million, across 12 funds.
Ed Crockett, fund manager at ASI, said: “These deals reinforce our long-standing commitment to the private rented sector in the UK, where we continue to target high quality housing stock in key cities.
“The UK market is currently worth more than £1 trillion and is set to grow with an anticipated 24% increase in private renting by 2022.
“With its secure long-term rental income streams, residential property is a compelling opportunity for investors. But product is key. Our experience in Europe, shows that what really counts is being able to create homes and communities that people want to live in for decades.”
Aberdeen Standard Investments’ current UK residential portfolio includes more than 800 private rented units and nearly 6,000 student rooms.
This complements a substantial European portfolio of 9,000 properties with a total value of €6 billion. The asset manager recently launched a pan-European Residential Property Fund with over €350 million from investors.
Capita and Colliers International acted for Aberdeen Standard Investments on the deals, while legal advisers were Pinsent Masons and Hogan Lovells.